Following five years of losses following the GFC the world’s biggest press manufacturer Heidelberg has started making a profit again.
According to preliminary calculations, the net profit for financial year 2013/2014 (April 1, 2013 to March 31, 2014) was around €4m, which compares with a loss in the previous year of €117m.
The profit came though as sales for the year fell further, from € 2.735bn down to €2.43bn (€2.54bn after adjustment for exchange rate movements) for this year.
New chief executive Gerold Linzbach says: “Heidelberg is once again making a net profit, which was our number one priority. Despite the weak sales situation, we have significantly improved our company's profitability."
"This impressive achievement lays the foundation for further positive developments at the company," he says.
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The onset of the GFC was devastating for Heidelberg, and all other offset press manufacturers, which saw sales plummet as banks stopped lending, advertisers stopped advertising, and the internet offer a cheap communications alternative.
The key US market virtually dried up, European sales collapsed, the press manufacturers were only kept going by sales to China and the other BRIC countries. Even then Heidelberg had to be bailed out by a combination of state and government loans.
Heidelberg says its 2013/2014 KPIs were far better than in the previous financial year. EBITDA excluding special items rose to €143m in the financial year just closed (previous year €80m).
This led to a doubling of the EBITDA margin from about three per cent to approximately six per cent. The result of operating activities (EBIT) excluding special items climbed to €72m over the twelve-month period, from minus €3m in the previous year.
Linzbach says: "The big improvement in the result after tax to a net profit demonstrates the success of our strategic reorientation, even with difficult underlying conditions. This now puts us in a position to press ahead with reorganizing the company by optimizing our portfolio."
"Our medium-term target of achieving an EBITDA margin of at least 8 percent remains unchanged," he says.
Linzbach told ProPrint last month that Heidelberg’s period of restructuring, which has seen staff numbers reduced from 20,000 to 12,000, has now ended, and that the company was now moving forward.
Among developments was its strategic move into digital inkjet with Fujifilm as its partner. Heidelberg is targeting some €200m in sales from inkjet. It has three main inkjet projects; a 3D object printer, a label press, and a B1 sheetfed press.
ProPrint was unable to reach anyone at Heidelberg Australia for comment.
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